Michigan to Debut Member-Owned Health Insurance Co-Op

Patterned after the credit union model, Consumers Mutual Insurance of Michigan is prepping to offer health insurance to low- and moderate-income residents and small businesses in need of low cost insurance options starting this summer.

The East Lansing, Mich.-based firm said it received $72 million in a federal loan as part of the Affordable Care Act to become a Consumer Operated and Oriented Plan health insurer operating much as a statewide credit union where interests of members control company decisions.

Members, including individuals and small businesses, will be owners of the new company, according to Consumers Mutual.

Through a partnership between doctors, hospitals and Consumers Mutual, members of the co-op will have the right to coverage of a wide range of responsible health care services, reasonable out-of-pocket expenses and access to medications that reduce illness and disabilities, according to Consumers Mutual.

Members will also have the right to open transparency between patients, physicians and Consumers Mutual, development of health care data and delivery of that data to physicians to assist decision making and prompt, plain language explanations and opportunities for discussion with Consumers Mutual professionals, the co-op said.

Consumers Mutual said its offices in East Lansing has about 23 staff who work with physicians, insurance agents and others to develop products to meet market needs.

The company also said it will be ready to offer insurance later this summer through insurance agents, and on Oct. 1 through the health insurance marketplace created under Obamacare.

“This is an extraordinary opportunity to fix health care in Michigan by creating consumer-focused health care products aimed at wellness, evidence-driven care and transparency,” said Dennis Litos, CEO of the new Consumers Mutual.

Litos brings 35 years of experience in health care administration including 18 years at the CEO level for two large hospital systems — Ingham Regional Medical Center of Lansing, Mich. (now McLaren Greater Lansing), and Doctors Medical Center of Modesto, Calif., to the new role at Consumers Mutual.

He previously served as a principal consultant with Lansing-based Health Management Associates, where he spent time developing an integrated health care delivery system for California's Stanislaus and San Joaquin counties in preparation for health coverage expansion due to 2014 health reform changes.

“We intend to be full and vigorous players in the health insurance marketplace exchange when it opens for business, and are already preparing to offer very competitive products to individuals and small businesses who are in need of high quality but affordable health insurance on and off the exchange,” Litos said.

Health insurance co-ops were created by Congress to enhance competition in the new state-based competitive health insurance marketplace and provide options in markets that have been dominated by an individual or a few insurance companies, Consumers Mutual said.